McKinsey analysis outlines that there are two kinds of markets/business models in the EU:- markets that focus on maximizing payment revenues by levying significant fees. Spain and Italy are the main examples. The United Kingdom and France also fall into this group, owing largely to their sizeable incident revenues. -markets that focus on reducing the cost of their payments by maximizing the efficiency of their systems or by moving customers to an optimal payment mix. The Benelux and Nordic countries are in this category.

This is not to say that the profitability of any given market depends on the category to which it belongs. Some revenue-focused markets, such as Poland, lose money because the high fees on cashless payments cannot compensate for the losses made on cash transactions. Nordic markets, by contrast, are among the most profitable in Europe, even though their fee levels are relatively low, because the use of cash and cheques has been successfully reduced and overall efficiency of the payment system is high.

The analysis of revenue structures in Europe shows that three countries - Italy, the UK and Spain - together generated profit of €16.5bn, or as much as the whole of the EU9. Germany and Poland, by contrast, showed losses of €1.7bn and €0.7bn. respectively. All countries made losses on transactions and accounts, excluding balance revenues, showing that payments are a heavily interest-focused business.

And what the future will look like is quite unknown. While the trend to more cost-based pricing is clear, it is also clear that a number of important rulings/rules as to interchange fees should be made definitive next years. Without that, it is impossible to build new panEuropean schemes (direct debit or cards). And with too much business uncertainty floating around, the industry can't be expected to move in any direction.

So while it is clear that the payment industry is heading for a new equilibrium, it is quite unclear what this equilibrium will look like in the near future.